This is the second in a series of blog posts discussing the water-energy nexus, a current focus of the Worldwatch Institute’s Climate and Energy team. A Worldwatch study that investigates water consumption over the lifetime of a natural gas power plant will be available soon.

In Malta, a small Mediterranean archipelago south of Italy, water and electricity costs areclosely linked. The Maltese Water Services Corporation operates three energy-intensive desalination plants, all of which use reverse-osmosis (RO) to filter the salt from readily available seawater. According to a recent report, “Electricity accounts for 75 percent of the cost of the water produced by Water Services’ RO plants.”
The national electric utility, Enemalta Corporation, recently increased commercial electricity rates by 60 percent, which had a significant impact on the RO plants’ production costs. In fact, Enemalta’s rate hike effectively raised both residential and commercial water rates up to 25 percent. But the public is weary of climbing water and electricity bills. At the end of February, thousands of Maltese protested against hikes in their utility bills on the streets of the capital, Valletta.

Malta is heading for a water crisis in the near future if it does not change its course soon. Gordon Knox, a retired geologist with Shell who now studies Malta’s freshwater aquifers, is convinced that the country’s groundwater will become completely unusable between 2015 and 2025 because of seawater infiltration. Throw in rising oil prices, which would balloon water rates even further, and Malta’s future appears grim. Without much time left, the nation is therefore acting swiftly on sustainability measures.

Hi-tech giant IBM is proposing the largest solution to Malta’s water-energy dilemma. At the end of 2008, IBM’s Global Services reached a €70 million agreement with Enemalta and Water Services to build a nationwide smart grid over five years. It will be the first multi-utility smart grid system in the world. The plan calls for the installation of 250,000 interactive smart meters to monitor water and electricity usage in real time. Some 11,000 smart meters had already been installed as of February 2010, and 80,000 meters are planned each year for the next three years. A fully networked system is scheduled to be online by the beginning of 2013.

The integrated water and electricity system will empower customers and help pinpoint theft, leakage, and defective equipment. The new water meters are sensitive enough to detect low-flow commercial losses, which were impossible for Water Services to see previously. Similarly, Enemalta’s new meters should all but end electricity theft. According to recent estimates, theft accounts for a significant portion of the 8 percent of Malta’s commercial electricity losses. Lastly, IBM is introducing a combined water and electricity billing system that allows customers to see their billing information, analyze their consumption data, and make their payments online through a web portal.

In addition to the smart grid plan, Malta is subsidizing new renewable energy and energy efficiency projects. In July, the government announced an eight-year feed-in tariff for solar photovoltaic (PV) systems, where Maltese residents can sell electricity to Enemalta at a rate of €25 cents per kilowatt-hour. Residents in Gozo, the second largest but sparsely populated island in the Maltese archipelago, receive a feed-in tariff rate of €28 cents per kWh to help push the government’s eco-Gozo initiative. Business and commercial properties will receive €20 cents per kWh for PV systems less than 100 kilowatts.

The government is also subsidizing solar thermal water heaters and collectors. Residents of Gozo are eligible for a grant of€560 to install a solar thermal system. Facing a water and an energy crisis, mutually reinforcing one another, Malta is forging a path toward a sustainable future by taking control of its water and energy resources now—before it is too late.